Celgene slipped up repeatedly last year. So why did CEO Mark Alles get a raise?

Considering that so much of a CEO’s pay is pegged to performance, Celgene CEO Mark Alles doesn't seem a likely candidate for a raise in 2018—not after the company stumbled repeatedly last year.

There was the FDA's embarrassing refuse-to-file notice on the company’s key pipeline asset, MS drug ozanimod, for example, and a string of woes with its multiple myeloma blockbuster Revlimid, including a key clinical trial failure.

But Alles did get a raise, even as Celgene’s shares were taking a beating—falling more than 39% by the end of the year and clearing the way for Bristol-Myers Squibb's $74 billion buyout announced this January. Alles’ 2018 pay package jumped to $16.2 million, an increase of more than $3 million, according to an amended 10-K (PDF) filed by the company to the SEC.

The disclosure follows more news that's positive for Alles' pocketbook: He's set for a $28 million payout after the BMS buy if he leaves the company, thanks to a new change-in-control plan Celgene put through in December, just as it was finalizing the deal.

For 2018, Alles’ base salary only rose 5% to $1.365 million, but he nabbed a bonus of $2.79 million, up from $2.19 million in 2017. When Alles was promoted to CEO in March of 2016, his target bonus was a maximum of 125% of earned salary. That went up to 150% in March of 2018, and when all was said and done, he reaped 137.5%, according to the filing.

The remaining value of Alles' total 2018 compensation came from stock and option awards: $6.3 million and $5.7 million, respectively. His stock awards rose by a little less than $1 million, and as for options, Alles scored almost $1.5 million worth over the year before.

To calculate executive bonuses for 2018, the company put a 56% weight on financial targets and the rest on “selected strategic corporate objectives,” including clinical and regulatory milestones, the amended 10-K explains. Celgene surpassed its financial goals for 2018, reporting $15.28 billion in revenues and $9.06 in adjusted earnings per share.

The company’s clinical and regulatory achievements were a little less black and white, though. The filing lists a raft of milestones, including an FDA filing for Otezla in Behcet’s disease and “clinical progress” on five midstage pipeline candidates, including bb2121, the Bluebird Bio-partnered CAR-T treatment for multiple myeloma—one of the assets BMS pointed to in justifying the $102.43-per-share value it placed on Celgene.

Maybe, but investors were more focused on Celgene’s troubles last year. And the company did acknowledge its struggles; it spent the first half of the year reshuffling its management team as it embarked on a turnaround effort. It hired Johnson & Johnson veteran David Elkins as chief financial officer and bid goodbye to COO Scott Smith and business development chief George Golumbeski.

Investors will vote on the BMS-Celgene merger in April, and Alles’ postdeal future with the company is unclear. His financial security, however, is guaranteed: He will get about $27.9 million if he leaves the company after the deal closes, according to a proxy statement filed with the SEC last week.

That payout comes courtesy of a well-timed overhaul of Celgene’s change-in-control severance plan. In December, the company put into place a plan that guaranteed Alles would get three times his salary and incentive pay if he leaves the company after the deal closes. He’d also receive three years of health benefits and other perks. Not bad, especially considering there was no change-in-control severance plan for Alles before.